Foreign brokerages remain cautious on the road ahead for the Indian equity markets. Though analysts at Nomura have revised their March 2026 Nifty target to 26,140 levels from the earlier 24,970, but the upside from the current levels is a modest 6 per cent. BofA Securities, on the other hand, has not made any change to its year-end Nifty target.
The correction seen in the stock markets thus far is insufficient and there are significant downside risks, given the way macroeconomic data is shaping up, a Nomura equity strategist said on Thursday. "The markets are trying to look through the current stress we see in the macros. There are potential risks to the market. "Our estimates assume no major impact on growth and earnings. "The market should have been at least 5 per cent lower than it is now.
Indian equity markets have a limited upside potential in the near-term as they negotiate the ensuing cyclical slowdown, wrote analysts at Nomura in a recent coauthored report led by Saion Mukherjee, their managing director and head of equity research for India. He, however, believes that the foundations are in place for sustainable growth over the medium-to-long term, and hence suggests a 'buy on dips' strategy to equity investors. As an investment strategy, Nomura prefers domestic-oriented sectors and companies over exporters, and prefers stocks that provide valuation comfort. Industrials and banks are their overweight sectors, while IT services and consumer discretionary are their underweight sectors.
The company has launched only 3 new products during 2015 when compared to 14 launches in 2014
Thus far in FY21, BSE, NSE have rallied 70 per cent and 71 per cent, respectively.
Equity strategists are basing their expectation on strong corporate earnings recovery, supportive global economic growth, and gradual improvement in business sentiment.
Competition in the US pharmaceutical market swelled in recent years, with increasing generic penetration.
Liquidity issues post the crisis at DHFL, progress of monsoon, rupee trajectory at the domestic level and oil prices are some factors that will keep markets choppy, analysts say.
'The news about the new virus strain in the UK provided them with an opportunity to take money off the table.'
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